House of Pianos, Inc. purchases pianos from a well-known manufacturer and sells them at the retail level. The pianos sell, on the average, for $2700 each. The average cost of a piano from the manufacturer is $400 House of Pianos, Inc. has always kept careful records of its costs. The costs that the company incurs in a typical month are presented below:

Chapter 03 1. House of Pianos, Inc. purchases pianos from a well-known manufacturer and sells them at the retail level. The pianos sell, on the average, for $2700 each. The average cost of a piano from the manufacturer is $400 House of Pianos, Inc. has always kept careful records of its costs. The costs that the company incurs in a typical month are presented below: Costs Cost Formula Selling: Advertising $1,300.00 per month Delivery of pianos $60.00 per piano sold Sales Salaries and Commissions $4,000.00 per month, plus 4% of sales Utilities $600.00 per month Depreciation of Sales Facilities $6,000.00 per month Administrative: Executive Salaries $13,000.00 per month Depreciation of Office Equipment $900.00 per month per month, plus 40 per piano Clerical $2,300.00 sold Insurance $590.00 per month